Mythbusting Canadian Health Care, Part II: Debunking the Free Marketeers

February 11, 2008

Sara Robinson

In the previous post, I looked at ten of the most common myths that get bandied about whenever Americans drag Canada into their ongoing discussions about healthcare. In this follow-up, I’d like to address a few of the larger assumptions that Americans make about health care that are contradicted by the Canadian example; and in the process offer some more general thinking (and perhaps talking) points that may be useful in the debates ahead.

Government-run health care is inherently less efficient — because governments themselves are inherently less efficient.
If anything could finally put the lie to this old conservative canard, the disaster that is our health care system is Exhibit A.

America spends about 15% of its GDP on health care. Most other industrialized countries (all of whom have some form of universal care) spend about 11-12%. According to the WHO, Canada spends a bit over 9% — and most of the problems within their system come out of the fact that it’s chronically underfunded compared to the international average.

Any system that has people spending more and getting less is, by definition, not efficient. And these efficiency leaks are, almost entirely, due to private greed. There is no logical way that a private system can pay eight-figure CEO compensation packages, turn a handsome a profit for shareholders, and still be “efficient.” In fact, in order to deliver those profits and salaries, the American system has built up a vast, Kafkaesque administrative machinery of approval, denial, and fraud management, which inflates the US system’s administrative costs to well over double that seen in other countries — or even in our own public systems, including Medicare and the VA system.

Not incidentally: one of the benefits of single-payer health care is that it largely eliminates the entire issue of “fraud.” You can only “cheat” a system that already views its primary business as rationing and withholding care. In Canada, where the system is set up to deliver health care instead of profits, and medical access is considered a right, this whole oversight machinery is far cheaper and more compact. In general, the system trusts doctors and patients to make the right choices the first time. As a result, people generally don’t have to lie, cheat, and grovel to get the system to deliver the care they need. They just go and get it — and walk out without a moment’s dread about the bills.

Shareholder profit, inflated CEO salaries, and top-heavy administration — all of which serve to work against the delivery of care, not facilitate it — are anti-efficiencies that siphon off 20-25% of America’s total health care spending. These are huge sums; yet it’s mostly money down a gold-plated rathole. In the end, it doesn’t provide a single bed, pay a single nurse or doctor, or treat a single patient.

We’ll have rationed care
Don’t look now: but America does ration care. And it does it in the most capricious, draconian, and often dishonest way possible.

Mostly, the US system rations care by simply eliminating large numbers of people from the system due to an inability to pay. Last year, one-quarter of all Americans didn’t go to a doctor when they needed one because they couldn’t afford it. Nearly that many skipped getting a test, treatment, prescription, or follow-up appointment recommended by a doctor. In Canada, those same numbers are in the 4-5% range; in the UK, 2-3%. Also: nearly 20% of all Americans had a hard time paying a medical bill last year; and these stresses now trigger over half of all personal bankruptcies in the country.

Furthermore, nominally having health insurance is no guarantee against financial ruin, as Sicko amply illustrated. Being cut off or denied by your insurance company is rationing, too. And there are vast numbers of fairly well-off Americans — many of them middle-aged, and too young for Medicare — who have pre-existing conditions that render them uninsurable at any price. They’re one heart attack, one diabetic event, or one bad turn away from financial disaster. Please don’t insult these people by telling them that the American system doesn’t ration care.

Another persistent (and ridiculously mendacious) rationing myth about the Canadian system is that old people are cut off from treatment and left to die. I’ve never heard about a single case of this in Canada; but it happens routinely to Americans on Medicare and many private policies, which have strict limits on how long you can stay in the hospital with an acute illness. When the benefits run out, ready or not, they send you home. If you die, you die. The Canadian plan has no such limits: you stay for as long as you need to. But in the US, these limits fit the very definition of “rationed care.”

Effectively shutting one-quarter of the population out of the medical system entirely, and putting many of the rest on short rations, certainly does make things so much nicer for those happy few who are still in it. In fact, Americans have these missing millions to thank for their system’s impressively short wait times. Only 4% of American have to wait more than six months for non-elective surgeries, while 14-15% of Canadian and Britons do. (Don’t blame this on government care, though: in Germany and the Netherlands, the number is closer to 2%.) When conservatives start bellowing about Canada’s terrifying wait times (which, by the way, are carefully triaged: it’s rare for people to die waiting, though it happens), we need to remind them that there are 75 million Americans who have been wait-listed forever. If my friend’s Aunt Millie gets her emergency hip surgery today because I’m willing to hobble along for an extra couple months before getting my knee surgery — well, for any morally serious person, that choice should be a complete no-brainer.

You can’t have medical innovation without the incentives provided by the free market.
As in the US, Canada’s government funds major medical research that has led to a continuous stream of new medical breakthroughs. (And as this link shows, the rate of innovation didn’t slow down in the least when Canada moved to single-payer in the 1960s.) All of the country’s medical schools are located within public research universities. The university that houses my local medical school, the University of British Columbia, ranked ninth in North America last year — in league with UC, Stanford, and other powerhouses — in total public and private research grants received by its labs. Among other things, it leads the way in genetics (David Suzuki is emeritus faculty), and stem-cell research (having attracted a handsome roster of American scientists whose research was thwarted by the political situation at home).

Because the Canadian health care system is driven by delivering care instead of profits, the focus of research is sometimes different — and often wider-ranging. While there’s plenty of pursuit of patents and innovations, there’s also considerable research put into questioning whether new treatments are really more effective than older ones; and in pursuing possible treatments that may not be patentable by anyone. The system is focused first on what works; and after that, on what might make someone some money.

Single-payer health care will make America less competitive.
I can’t believe people still have the gall to argue this point, but apparently, they do. There are several reasons this is flat-out wrong:

Jobs, Jobs, Jobs — It’s no secret that public health care is making Canada a more attractive business environment for large manufacturers, who typically have very high insurance overhead. Toyota and GM have both moved plants to Canada in recent years, in large part to avoid the spiraling costs of insuring American workers. (Toyota also cited Canada’s better-educated workers, but that’s another issue for another day.) As long as $900 of every car GM makes is going to supply health care to the people who make it, the US’s current system of employer-based health care is going to continue to drive skilled jobs out of the country.

A Smarter, More Entreprenurial Workforce — Being relieved of insurance worries also makes individual citizens more competitive. How would your life choices change if you didn’t have to worry about health care? Would you go back to school and get your PhD in lepidoptery? Start a blog — or a small business? Work part-time and travel? Tell your boss where he can stick it? Spend a few years at home with your kids?

Countries with universal coverage free up their citizens to take advantage of personal development opportunities that, in the long run, stimulate the economy and create a more skilled, traveled, educated, and fulfilled workforce. Americans, on the other hand, routinely stay chained to jobs they hate — and are forced to pass up on chances to expand their horizons and their fortunes — because they can’t afford to jeopardize their health care coverage. Our health care mess has reached a point where it jeopardizes not only our lives, but also our liberty and our ability to pursue happiness — as well as the long-term strength of the economy as a whole.

Increased Financial and Social Capital — When families are bankrupted by medical bills, or are thrown into poverty when a working member is disabled because they can’t afford proper care, or simply break down and fall apart under the stress of debt and illness, it’s not long before the country’s entire social fabric begins to show the wear and tear — along with the sense of optimism and the common good required for a democracy to function.

Part of what makes a country competitive is its own commitment to the common good. I’ve often been impressed by the very tangible sense of civic pride and shared effort my Canadian neighbors have in the fact that they’re taking the best possible care of their own, regardless of status, age, or ethnicity. Every encounter with the medical system reminds them that they’re all in this together. A medical system that routinely drives families into bankruptcy or divorce court is actively destroying, rather than adding to, the essential social capital that makes the whole society function.

No Deferred Maintenance — Decades of foregone medical care are starting to catch up with Americans. We’re seeing serious declines on many fronts: infant mortality, lifespan, cancer rates, heart disease rates, and increased diabetes. On most of the major markers of public health, America is nowhere near the top tier anymore. In some areas, there are a few small former Communist countries doing better than we are.

Business relies on healthy workers who aren’t distracted by their own illness or that of a family member. America’s uninsured, increasingly unhealthy workforce is in no position to compete on equal terms with the strong, healthy workers of other countries who are getting the care they deserve.

We have more important matters to tend to — like national security and the war.
Getting everyone insured is, unequivocally, a clear matter of national security.

Our every-man-for-himself attitude toward health care is a security threat on a par with unsecured ports. In Canada, people go see the doctor if they’re sick for more than a day or two. It was this easy access to early treatment, along with the much tighter public health matrix that enables doctors to share information quickly, that allowed the country’s health care system to detect the 2003 SARS epidemics in Toronto and Vancouver while they were still very localized, act within hours to stop them before the disease spread any further, and track down and treat exposed people before they got too sick to be helped. In both cases, the system worked flawlessly. The epidemic was stopped within days and quashed entirely in under a month, potentially saving of millions of lives.

In the U.S., that same epidemic might easily have gone unnoticed for critical days and weeks. If the first people to get sick were among those 75 million without adequate insurance, they probably would have toughed it out a few extra days before finally dragging their half-dead carcasses into an ER somewhere. Not only would they be much farther along in the course of the disease — and thus at greater risk of death themselves — every one of them could have infected dozens or even hundreds of other people in the meantime, accelerating the spread of the epidemic.

Worse: America’s underfunded public health system might have taken several days to piece together the whole picture of an epidemic; and perhaps another week or two might have passed before the E. Coli conservatives in charge (having thrown out the science-based management plans thoughtfully developed by the bureaucracy) cooked up some kind of half-assed ideology-driven decision about how to proceed. (It would, of course, involve spectacular amounts of lying to the public.) By that point, tens of millions could have been infected, leading to a death toll that would make 9/11 and Katrina look like minor statistical blips.

Think about superbugs and the ongoing waves of immunological imports from the world’s swamps and jungles. Think about terrorists with bioweapons. And then think again about the undeniable fact that every single underinsured American is a gaping hole in the safety net that protects us all from a catastrophic epidemic. This really is one of those cases in which none of us are safe as long as even one of us is left at risk. And from a purely economic standpoint: would you want to invest in a country where there was a significant risk that an epidemic or a bio-attack, managed by incompetent officials, might force you to shut down your business at a moment’s notice?

As for the war: Bush’s Folly will generate upwards of half a million veterans, many of whom will require some kind of sustaining care for the rest of their lives. VA funding ebbs and flows with the national political will, and veterans often fall behind other priorities. But if they can enter the same health care system every other American depends on, then we can only forget their interests by forgetting our own as well.

I feel a lot better knowing my taxes are taking care of my fellow Canadians rather than buying bombs to drop on Iraqi towns, supporting a fully-equipped CIA gulag, or funding Baghdad pizza deliveries via Halliburton. It’s hard to become a worldwide empire when you’re putting half your tax revenue into hospitals and doctors, as Canada does. But, on the other hand, it’s hard to insure your citizens when half your tax revenue is going to feed your war machine.

In a very real sense, America has chosen to secure its oil supply at the cost of its own citizens’ health. The more we spend on the former, the less we have for the latter. And our own relative health — both physical and economic — is starting to show the consequences of that choice. Ultimately, all these things are connected: by making ourselves energy independent, we might not only make ourselves more secure, we’ll also finally be able to invest in the kind of health care that will make us truly competitive in the world community.

The Bottom Line
In America, a lucky employee with gold-plated employer-based coverage may well get access to A-level care (though that level of coverage becoming rarer by the month, even among the professional classes). On the other hand, about 50 million under-insured Americans are barely scraping by with C or D-level care; and the nearly 50 million with no insurance at all get next to no care whatsoever. Worst of all: 18,000 Americans die every year due to lack of access to healthcare. That’s one every 30 minutes, around the clock, every day of the year — the equivalent death toll of six 9/11s every single year that passes.

In Canada, everybody gets at least B-level care, pretty consistently across the board — and, on occasion, quite a bit better than that. You might not like those odds if you’re one of the shrinking handful of Americans who’s used to A-level care; but if that’s not you, you’d be getting a much better deal in Canada.

The private sector has had 20 years to prove that it could deliver low-cost, quality care using those vaunted business-style efficiencies; and it has failed us utterly and completely. This fact should be the ultimate nail in the coffin of the old conservative canard that “the free market always does it better.” If that was true, privatizing health care would have been the shining example that proved it once and for all. Instead, all we got was a colossally expensive national disaster that’s denying full coverage to a third of the country — and putting our health, competitiveness, financial and social capital, and national security at risk in the process. It’s also devastating the aspirations of our entire middle class, which is being hollowed out by our current health policies.

A famous Hebrew prophet once advised his followers to take the log out of their own eyes before trying to remove the splinter from someone else’s. As much as it hurts American pride to admit it, Canada and the rest of the industrialized world has us roundly beat on this one. Those who are so quick to criticize the Canadian system might be better off holding their fire until they’ve shown us they can do better. America, and the world, is waiting.

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Sara Robinson is one of the few trained social futurists in North America. Her skill set includes trend analysis, scenario development, futures research, social change theories, systems thinking, and strategic planning. She is completing her MS in Futures Studies from the University of Houston, and holds a BA in Journalism from the USC Annenberg School of Communication.